STMicro profit eases 2%, sales rise

LONDON (MarketWatch) -- STMicroelectronics said Wednesday profit fell 2% on increased spending, but the decline wasn't as severe as forecast as sales of flash-memory chips and those for mobile phones increased.

STMicroelectronics
STM, +4.55%
(012970) reported fourth-quarter net income of $183 million, or 20 cents a share, versus net income of $187 million, or 20 cents a share, in the year-earlier period.

The chipmaker also produced its first operating profit in its memory-chip making division in four quarters, lifted by sales of flash-memory chips.

Analysts polled by Thomson First Call were expecting the Franco-Italian chipmaker to post earnings of 17 cents a share on revenue of $2.39 billion.

Paris-listed STMicro shares declined 1.5% after an early rise.

Gross margins eased slightly to 36.5% from 36.6% last year, but the figure was better than the 34.1% margin from the third quarter. STMicro cited volume growth and enhanced product mix and manufacturing performance for the sequential margin rise.

The company had guided for margins of 36%, plus or minus one percentage point.

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